I do love a good 90’s pun. Now back to business.
I was recently asked about my thoughts on transformation. How do I think about it? What does it take to transform an organization? What are the key steps and KPIs?
These are great questions. Transformations are BEASTs and if the tactical process and people changes aren’t hard enough, you will run into the brick wall that is “culture”. The whole process can take anywhere from 6 months to a couple of years. However, while each transformation is specific to the organization, the industry, and the product/customer mix, there are common themes and a framework with which to approach such an amorphous challenge.
At the core, the Chief Transformation Officer must answer two questions:
- What does the market want?
- How do I position my company to get there?
I like to think of the problem in 5 parts – split between internally and externally-oriented workstreams. Working backwards from the end-goal of solving a customer pain point, I organize my work as follows:
- External: Mapping out the Customer (and Product) Journey, leading to
- External: Developing the Business Strategy, which drives
- External: Architecting the Product Strategy, resulting in,
- Internal: Re-thinking the Organizational Design, and finally
- External: Communicating and Marketing the Improvements to the world
Let’s break these down.
- External: Mapping out the Customer (and Product) Journey
This is arguably the most important step of the process. This is the outline of your masterpiece. A great company and executive must understand the customer journey. What do you customers want? What are their pain points? Where do they abandon their relationship with you? Why do they come back to buy more? What cause them to spread the word?
There are many techniques to tactically do the mapping (I won’t go into the details in this post – email me at themrebitda@gmail.com for a deeper discussion on this) but it is critical to literally write out the customer journey and identify customers’ pain points. This is also a great place to identify where and when to pivot.
Huh? Pivot? Yes, pivot! A good business is an iterative and “agile” business – one that can identify market opportunities and take advantage of them.
For example – maybe you are selling lightbulbs and sales have been falling. You look at your process, and realize the product is great, customers love the quality, they come back and buy more, but sales have still been dropping. Why? As it turns out that while your customers love your quality, they are increasingly looking to get smart devices. Bingo! Adding a bit of tech into a bulb allows you to stop the hemorrhaging and even add new customers.
What many people miss is aligning the products to the customer journey. Often, you find that one product that you have spent a bunch of time and money on and it becomes very hard to “pull the plug”. But if that product doesn’t align with the customer journey – a good leader must have the courage to make the difficult – but correct decision.
External: Developing the Business Strategy
This is perhaps self-explanatory, but once you understand what the market demands of you (customer/product mapping) you want to re-create the strategy to attack the market. Depending on the organization, the CTO might be helping inform vs. set the strategy (often set by the CEO/CSO). In either case, it is important to challenge existing conventions and assumptions. Transformation in any organization is a monumental task, so missing setting the right strategy will late easily de-rail all your efforts.
External: Architecting the Product Strategy
Wait product again? What? Yes, product again – it’s important. But what is the difference between this and Product Mapping? Well in this step you need to actually build the new product(s) that you identified in your product mapping workshop – and actually create a priorities list.
I like to separate the two workstreams although they are very related. In product mapping you lay out the spectrum of products that the market wants. It’s like a pitch meeting really. You take that product wish list and take it to the CEO/CSO and then hash out the corporate strategy. During this step some of the products on your wish list will become casualties and it is very possible that other can be added to the list.
This step, then, focuses on the tactics of getting the products to market, the design of the products, and their actual implementation.
A good example of this is Amazon. They are notorious for building great “1st party/3rd party products”. These are internal products that become so great that it just makes sense to roll it out to the world. This happened with Amazon Web Services, for example. So, let’s say you identify the need to build an internal tool to operate your new Smart Lightbulbs, well maybe in the Product Strategy session, you realize that you can also make this platform extensible to other manufacturers and sell it.
In Architecting the Product Strategy, you want to go deep into the weeds and really figure out how to build the greatest products and then roll them out.
Internal: Re-thinking the Organizational Design
Ah! The Org design! The least sexy part of them all. But this is the second most critical part after the Customer Journey. Here you must see if your organization has the right capabilities, processes, and potential to not only execute in the short term – but also scale.
In this step you must think through all the internal operations of your business. How will you make the product? Can you innovate and differentiation on versions 2,3,4…X? Can you ship in large volumes? What happens when you have a defect? What happens when the supply chain stalls? What if you lose your key vendor? What are your contractual obligations? Are you staffed the right way? Do you need more people? Do you have the correct talent base? How do you create a customer service arm? Can you also use it to upsell? Do you have the right IT systems? Are they enabling you or preventing growth?
I can go on – but each one of these questions deserves a well through-through mini strategy and a working team tackling. Then there is culture! I will write about culture change in a later post – but changing people and culture is incredibly difficult.
If the Custom Journey mapping is your vision, the Business Strategy is your brain, then the org design and org strategy is the skeleton of your organization. You must get this right!
External: Communicating and Marketing the Improvements to the world
You did it! Now shout it from the mountain tops!!!
Just make sure to: frame it correctly, attract new customers, not piss off your old customers, be edgy, not be too edgy, showcase some success stories, but don’t misuse your customers brands/privacy, spread the word and go viral, but don’t go viral for the wrong reasons….
Basically, shout it – but have a good Comms/Marketing/PR team.
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